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I inherited a piece of furniture in 2002 that was appraised for the estate at $65,000. I am selling it at auction and the initial estimate is $100,000-$150,000. Will I owe taxes on the sale, or part of the sale over the estate appraisal value?


ANSWER


The BIDaWIZ Team's Answer:

Yes, you will owe taxes on the gain. The basis of the inherited property "steps-up" to the fair market value at the time of death, which was $65,000. If you sell the property now, your gain will be taxable and is calculated by subtracting the sale price by the "stepped-up" basis of $65,000.

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